How to Prepare Your First M&A Internship?

After weeks of searching and preparing, you have finally secured an M&A internship and are eagerly awaiting your first day. Congratulations!

For many business school students, a first internship in M&A is a crucial step towards a career in finance and rapid advancement. Indeed, this sector is known for its demanding nature, where speed, critical thinking, and rigor are highly valued qualities in those who have gone through it.

Therefore, being well-prepared before starting your first internship is a significant advantage that can help you stand out and make the most of this experience.

Understanding the sector's challenges and how to prepare for various tasks is essential.

1. Understanding the Fundamentals of M&A Before Your First Internship

While technical preparation is often required during interviews to secure your first internship, the various tasks you will encounter may remain unclear until you experience them firsthand.

Therefore, it is crucial to understand what M&A entails and its challenges. As you know, M&A operations aim to merge or acquire. These transactions are orchestrated by investment banks or boutiques, which play a crucial intermediary role. These institutions can be generalists, specialized in a particular sector, buy-side or sell-side oriented, and are often segmented based on the size of the deals (Smallcap, Midcap, Largecap).

During your internship, you will participate in advisory missions for various clients, such as target companies, acquiring companies, or investment funds.

Several steps follow in an M&A process, in which you may be involved. Your involvement in these steps will depend on the institution you are in (for example, some banks do not allow interns to work on Excel models, while others do) and the skills you demonstrate.

It all starts with origination, where investment bankers identify transaction opportunities. They prepare pitches to establish initial contact with potential clients. Once the opportunity is identified, a thorough analysis called due diligence is conducted. This step includes a financial, legal, and operational evaluation of the target to ensure its viability and strategic interest.

Subsequently, bankers build complex financial models, which can be created using DCF (Discounted Cash Flow) and multiples, to determine the target company's value.

The final phase involves drafting the necessary documentation, negotiating the transaction terms, and lifting the suspensive conditions before finalizing the agreement.

Thus, the better you understand the tasks you will face, the more efficient you will be. This efficiency will be recognized by your managers, who will appreciate it and may trust you with more in-depth and interesting tasks.

Different nuances may arise depending on the company and the team you join. If your first internship is in a TMT team, do not hesitate to conduct more in-depth research on this sector and study recent deals to understand the challenges behind it.

2. Being Ready on the First Day of Your M&A Internship

Once you understand the role and clients of the company where you will complete your first internship, a set of skills are essential to make your first experience a positive one.

• Essential Technical Skills for a Successful Internship in Investment Banking

Before your internship, several technical skills are crucial to master.

While you have likely memorized some of this knowledge to answer technical questions during your interviews, use the remaining time before starting your first experience to deepen these skills and learn to connect the concepts.

Indeed, many interns know the answers to technical questions by heart but struggle to apply them once on the job. Advanced mastery and a good understanding of everything you have prepared so far will help you stand out, ask the right questions, and positively impress your superiors (who may have had a very short night and will appreciate your quick analysis).

To achieve this, we encourage you to deepen your understanding of various multiples and the aggregates on which they are based and exploited, know how to build DCF and LBO models (understand their assumptions and implications), and be familiar with different accounting consolidations and IFRS/US GAAP standards, which are essential for analyzing companies' financial statements.

Additionally, learn to conduct sector research and study the competition to identify market trends.

To maximize your preparation and arrive as calmly as possible on the first day of your internship, do not hesitate to work in small groups with your friends and challenge each other on basic concepts. You can also take online courses offered by recognized platforms such as Trainy.co.

For all these tasks, investment bankers spend most of their time on Excel and PowerPoint. Therefore, mastering these tools is crucial to save time and efficiently respond to your superiors' requests (this may also help you avoid some late nights..). Learn the industry's best practices for these two software programs (color codes, etc.), create your own models to familiarize yourself with the tools, and learn the various keyboard shortcuts.

• Soft Skills to Master

In addition to these technical skills, do not hesitate to develop your ancillary skills.

As mentioned earlier, M&A is a demanding and rigorous environment where developing your soft skills is essential.

Learn to be clear and concise, both in writing (memos, teasers) and orally (during presentations or when asking questions).

Time management is also crucial in M&A. During busy periods, deadlines can tighten, and you may be asked to do a lot in a short amount of time without compromising quality.

Therefore, learning to manage your time and prioritize urgent tasks is essential. Without these qualities, you risk being overwhelmed by work and delivering poor-quality results to your superiors, who will notice and ask you to correct them.

Conclusion

While all of this may seem daunting at first, M&A experiences are very enriching and will help you gain competence in many areas. To better understand the behind-the-scenes and the customs of each company, we also recommend using LinkedIn to connect with industry professionals and alumni from your school and participate in informal interviews. They will often be happy to answer your questions, share their experiences, and provide various tips to manage this first internship effectively.

As you can see, being well-prepared for your first M&A internship is essential to maximize your learning and reduce the workload upon your arrival.

Additionally, it will demonstrate your seriousness and allow the teams around you to trust you and assign you tasks that other interns may not have the opportunity to see.

Succeeding in your first M&A experience is as important as finding it, as it will serve as a springboard for the future, both in terms of learning, relationships with your colleagues, and the referrals it could provide for future positions.